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$3.35 Billion in Kickback Lawsuit

Last week in federal court in Manhattan, the government said it deserves $3.35 billion from Novartis under the False Claims Act. The law suit is over alleged improper reimbursements for Exjade which is used for patients receiving blood transfusions. It’s also for Myforic used for patients with kidney transplants.

Why such a high dollar amount?

The U.S government is seeking up to $1.52 billion in damages which represents triple the amounts allegedly reimbursed and tainted by kickbacks from 2004 and 2013.

Besides the damages, the U.S. government wants fines up to $1.83 billion.  The fines range from $5,500 to $11,000 for each of the 166,031 allegedly false claims submitted for reimbursement.

Besides the federal government, 11 U.S. states and whistleblower David Kester are also suing Novartis. Kester is a former Novartis account manager and is acting on behalf of 17 other states.

What the lawsuit accuses.

The lawsuit accuses Novartis of paying kickbacks, in the form of rebates, to three specialty pharmacies. This was allegedly done to get the pharmacies to recommend refills of Exjade. This drug is intended to reduce iron levels in patients.

The drugmaker is also accused of offering similar rebates to five other pharmacies to recommend the refills of Myfortic over rival drugs. This drug is an immunosuppressant

 

Novartis “continues to dispute the allegations and is continuing to defend itself in this litigation,” company spokeswoman Julie Masow said. “We look forward to a full presentation of all of the evidence during the trial.”

A court date has been set, but will it settle?

A jury trial for this case is set to begin November 2, 2015. Court papers show this case could last several weeks. However, the government often settles False Claims Act cases before the cases go to trial.

 

Stay tuned as this False Claims Act progresses.

 

The case is U.S. v. Novartis Pharmaceuticals Corp, U.S. District Court, Southern District of New York, No. 11-08196.